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Aphria: Update on Analysts’ Target Prices and Ratings

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Aphria (APHA) reported its fiscal 2020 first-quarter earnings results on October 15. Despite the results being impressive, Aphria stock has fallen 16.3% since then. Various factors are affecting Aphria and the cannabis sector, which strengthened on November 20 after the House Judiciary Committee passed a bill for federal cannabis legalization. Let’s look at analysts’ price targets and ratings for Aphria.

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Analysts’ reactions to Aphria’s earnings

Aphria impressed investors with strong fiscal 2020 second-quarter results. It reported a second consecutive quarter of positive EBITDA, of 1.0 million Canadian dollars. Eight Capital and Cormark Securities reduced their target prices for APHA stock, while CIBC increased its target.

As I discussed last month, Jefferies analysts Owen Bennett and Ryan Tomkins were both bullish on Aphria after its earnings release, rating the stock as “buy.” Their target price of 11 Canadian dollars implies an 83% upside from its current price. To learn more about other analysts’ reactions, read Aphria: Analysts’ Target Price and Ratings after Earnings.

Latest price updates for Aphria

Since our look at APHA in October, the number of analysts covering the stock has increased to 13 from 12. Prior to Aphria’s earnings release, their average price target for APHA was 14.90 Canadian dollars. As of November 26, it was 16.7% lower at 12.40 Canadian dollars, which implies a 107% upside from the stock’s current trading price.

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Peers’ earnings

Aphria peers Aurora Cannabis (ACB), Canopy Growth (CGC) (WEED), and Cronos (CRON) reported their earnings this month. Canopy reported its fiscal 2020 second-quarter results. Whereas analysts had expected WEED to report revenue of 107.1 million Canadian dollars, the company surprised them with 109.3 million Canadian dollars in revenue. It also reported negative EBITDA of 155.7 million Canadian dollars. To learn more, read Canopy Growth Stock Falls after Weak Q2 Earnings. 

Cronos also reported negative EBITDA, of 23.93 million Canadian dollars, in its third quarter. Meanwhile, Aurora’s revenue rose 153.57% year-over-year in its fiscal 2020 first quarter but fell short of analysts’ estimates. Its EBITDA came in at around -39.67 million Canadian dollars. In contrast, Curaleaf and Green Growth Brands reported strong earnings results this month.

Comparing Aphria stock with peers

November hasn’t been good for cannabis stocks. Investors were disappointed with major cannabis players’ earnings results. As of November 26, Aphria was down 8.9% month-to-date, and Aurora, Cronos, and Canopy were down 33.4%, 17.9%, and 9.2%, respectively. Year-to-date, Aphria has lost 8.9%.

After the cannabis legalization bill was passed last week, cannabis stocks jumped. However, Jim Cramer’s views on the cannabis industry aren’t favorable. For more cannabis news, please visit 420 Investor Daily.

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